The
decision of the Court of Appeals is affirmed. The judgment of
the circuit court is affirmed in part and reversed in part,
and the case is remanded to the circuit court for further
proceedings.

Case
Summary: Plaintiffs, a lawyer and his law firm, sought a
declaratory judgment that certain provision of the Unlawful
Trade Practices Act did not apply to their debt collection
activities taken on behalf of creditors and debt owners.
Held: (1) ORS 646.607(1) applies to plaintiffs'
conduct because the term "unconscionable tactics"
encompasses plaintiffs' debt collection activities and
(2) ORS 646.608(1)(b) applies to plaintiffs' debt
collection activities.

The
decision of the Court of Appeals is affirmed. The judgment of
the circuit court is affirmed in part and reversed in part,
and the case is remanded to the circuit court for further
proceedings.

BALMER, C. J.

In this
declaratory judgment action, we consider whether provisions
of Oregon's Unlawful Trade Practices Act (UTPA) that
prohibit using "unconscionable tactic [s]" to
collect certain debts, ORS 646.607(1), and causing likely
"confusion" or "misunderstanding"
regarding loans and credit, ORS 646.608(1)(b), apply to the
debt collection activities of plaintiffs, a lawyer and his
law firm. The trial court held that those provisions apply
only to certain consumer relationships and that
plaintiffs' roles as a lawyer and law firm engaged in
debt collection activities, and not as a lender or debt
owner, removed their activities from the scope of the UTPA.
The court granted plaintiffs' request for an injunction
preventing the Oregon Department of Justice from enforcing
the UTPA against plaintiffs. The Court of Appeals reversed
the circuit court's declarations of law and the
injunction, concluding that the UTPA does apply to
plaintiffs' debt collection activities. Daniel N.
Gordon. PC v. Rosenblum.276 Or.App. 797, 370 P.3d 850
(2016). On review we affirm, although our interpretation of
the statutes differs in some respects from that of the Court
of Appeals.

I.
FACTUAL AND PROCEDURAL BACKGROUND

Daniel
N. Gordon, PC. and Daniel N. Gordon ("law firm" or
"plaintiffs") represent creditors and debt buyers
in their attempts to collect debt, often defaulted consumer
credit card debt. The law firm assists its clients with
pre-litigation collection activity, civil litigation, and
post-judgment collection efforts. The business is
high-volume: In 2010, the law firm pursued collection of more
than 16, 000 accounts, obtained judgments with respect to
approximately 9, 000 of those accounts, and collected on
approximately 4, 000.

In
2011, acting on several years of complaints about the
practices of the law firm, the Oregon Department of Justice
("DOJ" or "defendant") investigated the
law firm. The investigation revealed a number of practices
that DOJ determined might violate the UTPA. For example, in
every collection complaint examined by DOJ, the law firm
alleged a right to attorneys' fees and interest on the
debt, despite in many cases not attaching a contract showing
those rights.

Additionally, DOJ found evidence that the law firm failed to
follow choice of law provisions in applicable contracts and,
as a result, sometimes pursued debts that were barred by the
relevant statute of limitations. In the many cases resolved
by default judgment, the veracity of the contents of the
complaint-and the debtor's obligation to pay-was never
established in an adversarial process. As a result of those
and other findings, DOJ concluded that the law firm

"had a pattern and practice of filing thousands of
breach of contract actions against credit card debtors and
obtaining default judgments for attorneys' fees and
interest in a manner that apparently took advantage of the
debtors' legal ignorance, lack of resources and general
belief that they could not fight the claim."

DOJ
determined that it had probable cause to sue to enjoin the
law firm and its attorneys from engaging in trade practices
prohibited under sections ORS 646.607(1) and ORS
646.6O8(1)(b) of the UTPA.

Based
on that conclusion, DOJ served the law firm with a proposed
Assurance of Voluntary Compliance (AVC) and demanded that the
law firm execute the agreement. Under the AVC, the law firm
would change its behavior as specified in the agreement and
DOJ would release the law firm from any liability under the
UTPA. The remedies contained in the AVC addressed both the
law firm's non-litigation collection activities, such as
its use of autodialers, and its litigation activities. The
AVC required that any complaint in a breach of contract case
involving credit card debt filed by the law firm in Oregon
include certain documents, such as a copy of the contract
between the creditor and debtor in effect at the time of the
creditor's charge-off, and certain information, such as
the date of the last payment. It also prohibited the law firm
from seeking attorneys' fees as part of any default
judgment and required the law firm to use independent
contractors, rather than its own employees, to provide
service of process.

Plaintiffs
refused to execute the agreement and instead initiated this
declaratory judgment action. Plaintiffs' complaint
contended that the UTPA and the Unlawful Debt Collection
Practices Act (UDCPA), ORS 646.639, did not apply to their
actions while representing clients in debt collection
activities and sought an injunction preventing DOJ from
enforcing those statutes against plaintiffs. On cross motions
for summary judgment, the trial court entered judgment for
plaintiffs and issued an injunction.[1]

DOJ
appealed. The Court of Appeals affirmed the trial court's
holding that the UDCPA did not apply to plaintiffs' debt
collection activities. Daniel N. Gordon, PC, 276
Or.App. at 814-22. Neither party challenges that holding
before this court, and we do not address it. The Court of
Appeals, however, reversed the trial court's decision
that the UTPA did not apply to plaintiffs' debt
collection activities. In analyzing the UTPA, the court first
construed ORS 646.607(1), which prohibits a person, in the
course of the person's business, from employing "any
unconscionable tactic in connection with *** collecting or
enforcing an obligation." ORS 646.607(1). The Court of
Appeals disagreed with plaintiffs' contention that,
because the debtors were never customers of the law firm, the
law firm's actions were not "unconscionable
tactics" as that term is used in the UTPA. The court
concluded that "the statute does not require plaintiffs
and a debtor to have a consumer relationship, "
interpreting the UTPA to encompass plaintiffs' alleged
conduct.[2]Daniel N. Gordon, PC, 276 Or.App.
at 809.

Next,
the court construed ORS 646.608(1), making it unlawful for a
"person, " in the course of the person's
business, to cause "likelihood of confusion or of
misunderstanding as to the source, sponsorship, approval, or
certification of real estate, goods or services."
"Real estate, goods or services" includes
"loans and extensions of credit." ORS
646.605(6)(a). Plaintiffs argued that the statute applied
only to confusion or misunderstanding caused by a person
regarding that person's own real estate, goods, or
services, and not real estate, goods, or services that
were provided by some other party. As plaintiffs represented
creditors and third-party debt buyers and did not provide
loans themselves, under that construction the statute would
not apply to them. Again, the Court of Appeals disagreed. It
explained that "the statute's text does not
explicitly require that the unlawful practice in the course
of the person's business must be with respect to that
person's own real estate, goods, or services."
Daniel N. Gordon, PC, 276 Or.App. at 811.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Court of Appeals thus concluded that the trial court had
erred in holding that ORS 646.607(1) and ORS 646.608(1) did
not apply to the law firm&#39;s conduct. Id. at 822.
It reversed those parts of the declaratory ...

Our website includes the first part of the main text of the court's opinion.
To read the entire case, you must purchase the decision for download. With purchase,
you also receive any available docket numbers, case citations or footnotes, dissents
and concurrences that accompany the decision.
Docket numbers and/or citations allow you to research a case further or to use a case in a
legal proceeding. Footnotes (if any) include details of the court's decision. If the document contains a simple affirmation or denial without discussion,
there may not be additional text.

Buy This Entire Record For
$7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.